2019 (7) TMI 1363 - AT - Income Tax

Reassessment u/s 147 r.w.s. 144 - proof of valid service of notice u/s 148 - HELD THAT - We find that the contention of the assessee is contrary to the record and further once the AO has issued a notice u/s 148 dated 29.12.2009 which is also established from the Despatch Register filed before us, then the dispute of the service of the same will not render the assessment proceedings null and void. The notice u/s 148 was duly issued by the AO and it was also attempted to serve on the assessee at the given address. The address is not disputed though the assessee has claimed to have shifted from the said address. However, all subsequent notices issued by the AO even one dated 01.12.2010 was received by the assessee in person issued at the same address, then the notice issued at the correct address with the report of the process server in the light of the subsequent notice issued at the same address received by the assessee would be deemed to be a proper service of the notice issued u/s 148 . Accordingly, we do not find any error or irregularity in the impugned order of the ld. CIT (A) qua this issue. Exemption u/s 54F and 54B - assessee claimed to have purchased land on 23rd September, 2009 through an agreement to sale with alleged agreement to sale is unregistered and the payment is also claimed to have been made in cash - HELD THAT - Though the agreement to sale which has finally culminated in sale deed is relevant only for the purpose of the date of investment, but the alleged agreement to sale itself is not a title document transferring the ownership of land. Therefore, in the absence of subsequent sale deed, the claim of deduction u/s 54B and 54F cannot be allowed based on such unregistered agreement to sale. The assessee has failed to prove that he has acquired the new asset within the prescribed period after the sale of the existing asset. Further the purchase of agricultural land through agreement to sale dated 23rd September, 2009 clearly shows that the assessee has managed that agreement only a day before the expiry of the period. However, when there is no subsequent sale deed, then the unregistered agreement will not transfer any title to the assessee of the agricultural land. Accordingly we do not find any merit or substance in the claim of deduction u/s 54B and 54F. - Decided against assessee

Summary

Issues Involved:
1. Validity of reassessment order under section 147 read with section 144 of the IT Act due to alleged invalid service of notice under section 148.
2. Denial of exemption under sections 54F and 54B of the IT Act.
3. Applicability of section 50C of the IT Act.

Issue-wise Detailed Analysis:

1. Validity of Reassessment Order:
The primary contention of the assessee was the alleged invalid service of notice under section 148 of the IT Act. The assessee argued that the notice was claimed to be served on a person named Smt. Pushpa Bai, who did not exist in the family, and that the actual name of the wife was Smt. Bhura Bai. Furthermore, the assessee had shifted addresses, making the service of notice at the old address invalid. The Tribunal attempted to verify the signature through the Central Forensic Science Laboratory (CFSL), but the results were inconclusive due to non-comparable signatures. Despite these claims, the Tribunal found that subsequent notices were served at the same address and were accepted by various family members, including the assessee in person. The Tribunal concluded that the service of notice on the wife of the assessee was proper and valid under section 282 of the IT Act read with Order 5 of CPC, thus dismissing the assessee's ground.

2. Denial of Exemption under Sections 54F and 54B:
The assessee claimed deductions under sections 54F and 54B for investments made in agricultural land and a house, allegedly in the name of the wife. The CIT (A) found that the assessee failed to provide documentary evidence of these investments, with only unregistered agreements and cash payments being produced. The Tribunal upheld the CIT (A)'s decision, noting that the unregistered agreements did not constitute valid title documents and that no sale deed had been executed even after ten years. The Tribunal emphasized that without a valid title document, the deductions under sections 54F and 54B could not be allowed.

3. Applicability of Section 50C:
Given that the deductions under sections 54F and 54B were not allowable, the Tribunal found this ground to be infructuous and did not address it further.

Conclusion:
The appeal of the assessee was dismissed on all grounds. The Tribunal upheld the validity of the reassessment order, denied the exemptions under sections 54F and 54B due to lack of valid title documents, and found the applicability of section 50C to be irrelevant in this context. The order was pronounced in the open court on 28/06/2019.